Target foreign businesses, not white Namibians – NCCI
NEEEF not original, mere copy and paste
Namibia Chamber of Commerce and Industry (NCCI) is not impressed with the contents of the proposed NEEEF policy, saying it is mere copy and paste from other legislations from countries like South Africa and it does not possess originality to address empowerment issues facing Namibia.
As the debate continues regarding the contents of the NEEEF Bill, NCCI is of the view that, in its current format, NEEEF will not be able to address inequality and unemployment in Namibia.
White and foreign business owners in Namibia anxiously wait to know how the Bill will affect their business empires, as Government pushes hard to ensure that previously disadvantaged Namibians are roped into the economic mainstream of the country in order to uplift their standards of living.
NCCI chief executive officer, Tarah Shaanika, believes NEEEF should not focus on blacks versus white businesses but rather on Namibian versus foreign-owned businesses.
“We want the definition of previously disadvantaged persons to be focused on black Namibians and we also want to see transformation taking place in terms of foreign vs Namibian businesses because so much of our economy is in foreign hands. It is better when businesses are owned by white Namibians instead of foreign owners,” said Shaanika during a telephonic interview with this publication this week.
Pressure is mounting and Government has been copiously warned that NEEEF in its current format might end up destroying the economy instead of empowering previously disadvantaged Namibians.
Although the NEEEF document states that empowerment will take place as a voluntary business practice, it also says that Government will use all legitimate market mechanisms like tenders and licences to promote the policy.
“To transform the economy we should consider empowering all Namibians but the Bill is not considering this reality. I do not see how poverty will be eradicated when a lot of our economy is in foreign hands and a lot of money continues to leave the country through dividends and companies procuring from outside instead of locally,” he lamented.
Shaanika wants more emphasis placed on transformation and supporting existing and emerging black businesses in the country. “This is not clear in the document, hence, we do not think buying ownership will address unemployment, poverty and inequality and poverty.”
An empowerment commission has been proposed, which will rate companies tendering for Government projects according to five empowerment criteria, including whether previously disadvantaged Namibians own at least 25 percent of the tendering company.
The commission will also look at management control and employment equity. Ideally, at least 50 percent of a board and management should be Namibians.
In addition, investment in skills development and training will be a factor. According to NEEEF, at least 1.5 percent of gross wages should be spent on this.
Also to be considered by the commission is how much a company supports businesses of historically disadvantaged Namibians and it will take into account how much a company invests in the community. A minimum of one percent of after-tax profits should be earmarked for community projects.
Shaanika is adamant that blacks buying shares in existing companies is not the panacea to empower them because it will not give them room to develop.
“Emphasis must be on entrepreneurship development and special programmes must be created that aim to capacitate black entrepreneurs who should be empowered to create new businesses and grow them instead of buying into existing businesses,” he proposed.
With local companies often moaning that they are forced to procure goods from outside the country because of unavailability locally or an inconsistent supply chain, Shaanika feels such companies must be compelled to source goods and services locally. “Capacity can be created but there must be surety from the companies because it is difficult to start a company supplying big businesses unless there is a commitment. They [companies] must have good grounds as to why they want to procure goods from outside, otherwise they must commit to the local suppliers. That is the only way we can grow the economy through procurement because it will boost production and create jobs,” Shaanika said, adding that companies must also be forced to devise plans indicating how they will contribute to develop local supply.
Shaanika further noted that companies should undertake corporate social investments to empower remote communities.
“Investment needs to be made to address the issue of broad-based empowerment. The empowerment commission must address it and ask companies to direct their corporate social investments into specific communities to reach our remote communities. Shareholding will not create wealth or address poverty and inequality,” he said.
Shaanika also expressed concern over the proposed composition of the commission, which will comprise mostly of ministers.
“The empowerment commission is made up of politicians and ministers and it is too big. We tend to place too many responsibilities on the shoulders of ministers, who already have their plates full. I do not know why we do not bring in other people with experience to serve on this committee?” he questioned.